Hello Readers! Welcome to another knowledgeable article on BEC CPA Exams.
Generally, people get intimidated by CPA Exams and are not able to decide whether they should attempt them or not.
Today, we are going to cover the essentials you need to know about BEC CPA Exams.
By the end of this article, you will better understand the facts about BEC CPA Exams and how to prepare for them.
Here is what we will cover in this article:
Let’s get started right away!
About BEC CPA Exams
After the CPA exam, the person should obtain a CPA license, credentials, and an advanced degree that will aid in getting them better jobs. The professional responsibilities of a CPA are not as simple as a regular accountant.
People with a CPA degree can provide the audit reports of the company to the IRS as part of their jobs. This is because they are appointed for financial management and auditing purposes.
BEC CPA Exam is essential to ace your career as a Certified Public Accountant. However, understanding the entire process of this exam is equally important as appearing for it.
There is a specific pattern that requires four areas to be cleared, alongside other CPA review courses that you can take. Each part has an exam that is 4 hours long. There is a set period, and you need to clear all four exams in 18 months with a passing score of 75 or higher.
You can appear in all 4 of the parts in one testing window. But we would suggest taking a maximum of 2 at a time. If you fail in one, you can not reappear in the same exam in the same testing window. You will have to wait for the next opening.
AICPA is a body that regulates the CPA exams and their licensing. They write and format the exam, but they do not administer it.
Roles of CPA:
The roles of a CPA include a lot of professional responsibilities, including the ones listed below.
- Tax Preparation
- Legal tax representation and IRS
- Business audits
- Audit financial reports
- Attestation services
- Budgeting and other accounting-related services
Now that you have a fair idea about the CPA exams, here is what you need to know about the BEC part of the CPA exams.
This BEC section of the CPA exam requires preparation for MCQs and task-based simulation. In addition, the Business Environment and Concepts, blueprints, and exam section cover the business environment and business concepts.
The five main areas of the BEC exam sections are:
- Review services
- Financial reporting and tax preparation
- Professional responsibilities
AICPA usually updates the content tested in the CPA exam. In addition, the exam blueprints are updated to make preparation easy for the students.
The topics are often revised and upgraded to keep the study up to date, professional, and beneficial.
As of 2021, some topics were recently added to the BEC CPA exam like internal controls, business processes, Information technology, Enterprise risk management, etc.
In addition, a few other topics were added to the BEC section to test the business decision-making ability of students, such as understanding data and analytics.
The newly added topics add more value to the CPA candidate’s testing system. In contrast, the candidates in the past have achieved record-breaking pass rates. One reason is that it has the least number of MCQs, only 62.
TBS (Task-Based Simulation) is another reason for hyped-up pass rates other than the lowered number of MCQs.
Students tend to perform better in live problem-solving activities than in written exams.
The candidate’s ability to write an organized and well-developed business document is proven through TBS.
One part of the exam that is only included in BEC and not in any other part of the CPA exam is Written Communication.
The written communication part presents a written scenario that one should read with proper focus and attention.
The written response should be clear, have the complete and correct information, and be professional.
It is essential to learn about the other areas of CPA exams to understand the BEC exam format.
Exam Format and Parts for CPA
BEC CPA exam format is similar for all four exams, and you need to clear all of them. Below is the pattern briefly described for each part of the exam.
Each exam is formatted in blocks called Testlets. Each testlets has either MCQs or simulations that are task-based.
The pattern includes:
- Multiple Choice Questions in testlets: The testlet starts with medium-level difficulty. If you clear it, the level of difficulty will increase next time.
So if you do not do well on a medium difficulty level in MCQ testlets, you will get a lower difficulty level.
You should try to get the higher difficulty level as it weighs more on the result.
- Task-based Simulation: There are no study tips for this one. The tasks are different in each exam.
The set problem allows you to apply your knowledge and skill in solving the problem. Mostly the part includes matching and fill-in-the-blanks.
There is no hard and fast rule about how many questions will come. All exams have different sorts of questions and different difficulty levels.
In recent times, AICPA has increased the time for the BEC exam.
- Written communication: This is only a part of the BEC exam. No other part of the CPA exam has this part. This part of the exam tests a student’s communication and technical writing skills.
In recent years AICPA has changed the way they grade the exam. Now, MCQs have less weightage, and task-based simulation holds more value.
Parts of the Exam:
As stated above, there are four parts to the exam. However, in this article, we primarily focus on the BEC part of the CPA exam. So, we will just skim through the other three parts briefly.
The level of difficulty in each of the components is different. It is more like branches of the subject.
You need to understand all four and must clear all the exams before you get the degree or apply for a CPA license.
The parts of the exam are:
1. Auditing and Attestation (AUD): In this exam, your knowledge about the AICPA professional code of conduct, auditing, assurance services in public accounting, reviews, compilation, and attest engagements are tested.
The exam score allocation is based on a few factors. The areas include;
- Professional responsibility and ethics
- General principles
- Assessing risk and developing planned response
- Performing further procedures and obtaining evidence
- Forming conclusion
2. BEC: Business Environment and Concepts is an exam that considers the environment in which the business operates.
Exam content includes cost accounting, financial accounting, macro and microeconomics, management, and information systems.
To pass BEC, you must ace all the areas that are stated below:
- Corporate governance
- Economic concepts and analysis
- Financial management
- Information technology
- Operations management
In addition, one part of the BEC exam is not present in the other three parts – the written communication tasks.
This BEC section covers technical writing skills and the person’s communication skills.
You can master this topic by investing your study time wisely. You can clear all the areas like financial accounting, financial reporting of a business, etc.
However, you have to depend on your skills in this particular area. This area digs in towards the business side more than the AUD.
3. Financial Accounting and Reporting (FAR): It tackles most of the exam sections and covers financial accounting and reporting, including the FASB framework, financial statement preparations, variance analysis of the numbers of the accounts, IFRS rules, etc.
Here are the topics covered in the FAR exam.
- Financial reporting, conceptual framework, standard-setting
- Financial statement accounts
- Local and state government
Being the vastest examination area in the CPA exam, this exam has the longest exam time. But now, some of its time is cut short and added to the BEC exam.
4. Regulation (REG): It is the only section of the CPA exam covering accounting topics.
This topic focuses on business, individual taxation, business law, etc. With these topics, a few other things also fall under REG.
- Individual taxation
- Professional responsibilities, ethics
- Federal tax procedures
- Business law
- Property transaction federal taxation
- Entity federal taxation
BEC Study Guide
It is essential to study for the BEC exam in the right manner, or else you will be putting your CPA career at stake.
There are two types of questions added by the AICPA in the BEC CPA exams testlets; pretest questions and operational questions.
The marking, however, is only on operational questions. The pretest questions are asked to gather information about the CPA candidate.
The exams are based on both content areas as well as business cycles. BEC exam consists of:
- 62 multiple-choice questions
- 3 TBS
- 2 WC
After completing the TBS section of the exam, candidates are given a 15-minute break. You have the choice to either take a break, or you can also continue with the next section of the exam.
We recommend you take a break as it positively impacts the brain and increases the chances of performing better and passing the BEC exam.
The break will also help you to start afresh from the next section.
AICPA judges a candidate on four different skill levels by the examiner: evaluation, analysis, application, comprehension, and retaining power.
To increase your chances of clearing the BEC and all CPA exams, you can take guidance from the review courses.
Here are a few popular review courses you can refer to:
1. Becker’s Exam Review Course: Only a handful of CPA review courses partners are reliable.
Becker is a partner of CPA. They have a history of helping students attain their CPA license and are reliable knowledge providers for CPA candidates.
They have a team of industry leaders who give professional guidance to the students, which equips and prepares them to solve exam questions.
2. Surgent: Surgent is another CPA exam review company. It helps students of CPA to study smarter rather than longer.
In addition, they emphasize helping students understand the exam format alongside studying the exam topics.
They trim down the study time by cutting off the less important topics and promising candidates a passing score after only 58 hours of study.
3. Gleim: It is a preparatory course by Irvin N. Gleim.
Gleim is one of the top preparators of CPA, which helps the candidates for different accounting exams like; CMA, CIA, and EA exams.
This CPA review course for CPA candidates is focused on excelling in all four parts of the exam.
Study Tips to Master Your BEC Exam
When studying for any exam, you need to set a study time.
60-80 hours is the time we propose you invest in total. If you’ve passed FAR, it won’t take you even that long to prepare further. It would be best to use CPA blueprints to study to get as close to the AICPA content criteria as as possible.
BEC is a combination of miscellaneous topics, including economics, business and business cycles, financial concepts, etc.
Here are a few tips to help you create the hyper-focus on exam preps.
- Study one topic at a time. Try to finish the related topics. For example, if you are studying working capital, we suggest completing the whole balance sheet and ledgers topic.
This will help you create a link between the topics and be easier to recall.
- Focus on the CPA blueprints highlighted by AICPA. Like, when studying corporate governance, focus on the audit committee and the role of the board of directors.
- Use common sense. Some sections can be simple to understand and require no in-depth knowledge.
You can use your common sense and straight thinking to answer those questions and save time for rather challenging and technical topics.
- Memorize formulas. You cannot avoid this. It is based on financial accounting.
For example, if you get a question on the business’s profitability, how will you calculate profit if you don’t know how to calculate working capital, liability, etc.
Therefore, try to memorize the basic formulas and their underlying concepts.
- Work on your weak areas. Focus more on the subject you do not understand well. Give it more time.
- Prepare for written communication. It is only in BEC, so that you might get sidetracked. Do more practice and make sure you know every way to go about it.
- Do not give up, and do not underestimate BEC. Although many people have cleared the CPA exam with flying colors, it certainly is not something to underestimate.
Be well prepared and put in extra hard work.
Core Topics to Cover for BEC CPA Exam
Another useful tip for studying for BEC is to cover the exam course, topic by topic. Here are some major areas you should not miss out on while preparing.
- Corporate Governance: it is also connected to AUD, so you need to give it much importance.
Focus on crucial points, like the role of the board of directors. This is a relatively easy topic; ensure to have all the concepts clear and no confusion.
- Financial Management: You can take the help of accounting professors if you find it complicated.
It is better to get the calculation right because that would lead to the right answers and save time.
With all the experience in hand, the professors will be able to clear the underlying concepts better.
- Information Technology: This is already an integral part of businesses today.
It is a vast subject, and if you are not tech-savvy, you might have to spend more time understanding it.
You must know that IT impacts most of the business accounting and finance functions and departments in the present era.
Practice the questions to be sure you are aware of all the concepts.
- Economics: The economics concepts shouldn’t be difficult even if you are new to this subject.
Just try to understand the concepts, and make sure to do lots of practice.
- Cost Accounting: If you don’t have prior knowledge, we advise you to get professional help on this topic.
You need to put in extra effort here and get all the formulas and concepts clear. The AICPA is known to put forward tricky questions in this area.
There are several ways to seamlessly prepare for the BEC CPA exam and kick start your career successfully.
All you need to do is prepare for it thoroughly. Do your research, get familiarized with exam patterns and then study accordingly.
Study throughout the course and do not pile up the topics for the end.
The BEC exam has a pass rate of 62.84%, and there is no reason you should not be in that ratio.
Prepare wisely and pass the exams in one go!